Shockwaves From the Pandemic Continue to Rock the Housing Market
Happy Summer solstice! Just like the Earth’s seasons, the real estate market follows a predictable cycle. In the early summer months of May and June, as families prepare for the next school year, the housing market heats up with more activity. Increasing numbers of homeowners list their homes and buyer activity picks up. Most families go on vacation in July and the housing market traditionally hits a brief pause, before experiencing another bump in August through October. As Fall rolls in, the housing market slows down. Housing inventory and buyer activity is the lowest during the holiday seasons and the cold Winter months. Then, when the weather warms up again the following Spring, the housing cycle starts anew as more sellers list their homes and buyers prepare to make moves.
Denver follows this same market cycle. Over the last 13 years since the housing crisis, the supply of homes on the market has increased from April to May as more sellers list their homes. For the first time since 2008, this trend has been broken. Due to the unprecedented demand and limited supply, active inventory decreased April 2021 to May 2021, by an astonishing 20.01 percent. This is just another record in a year for the books.
Active listings are also down over 70 percent, year-over-year, from May 2020 to May 2021. In the same time frame, closings are up almost 50 percent. This data reflects the surge in activity the Denver housing market has experienced during the last year. Housing prices have soared nationally, and Denver is no outlier to this trend, with average prices topping $700,000.
This remains a strong seller’s market with national records, daily headlines, and plenty of pitfalls! It is not uncommon for homeowners with unrealistic expectations to set excessive asking prices. Overpriced listings sit on the market and languish. Ambitious pricing can quickly sour. A real estate advisor can help you create a competitive listing.
On the buy side, competition is steep. Successful buyers are starting their housing search well below their budget so they have room for competition. It remains to be seen if prices can continue this pace of increase or if buyer’s fatigue will begin to set in. Don’t let the challenges of this market deter you from your housing goals. At CJV, we are here to help!